Supply Chain Management has a language of its own.
It has a terminology used across the globe by the supply chain
professionals. It is necessary for you to know the meaning of SCM
terminology. In this section ,of supply chain vocabulary , we have
tried to enlist the terms that will help you as a professional
of supply chain or as a student who is to take test / certification in
supply chain management.
Terminology has been provided alphabetically for ease

ABC AnalysisApplied in the context of inventory, it's a determination of
the relative ratios between the number of items and the currency
value of the items purchased on a repetitive basis. 10-20% of the
items ('A' class) account for 70-80% of the consumption, the next
15-25% ('B' class) account for 10-20% of the consumption and the
balance 65-75% ('C' class) account for 5-10% of the consumption.
'A' class items are closely monitored

Absolute AdvantageA competitive strength enjoyed by a party as a result of a
natural endowment or other natural gifts that other parties do not
have

AcceptanceThe intentional indication of an offeree to be bound by the
terms of an offer

Acceptance TestingA statistical quality control technique used to evaluate the
overall condition of a given lot by inspecting only a sample,
drawn randomly from the lot

Accessorial ChargesCosts that carriers usually charge in addition to the
transportation cost. They include single shipment, inside
delivery, loading ,unloading , notification and storage and
redelivery charges.

Administered PriceA price determined by certain policies rather than by the
competitive forces of the marketplace. For example, prices of
sugarcane etc. in India is determined by the government rather
than the market forces of demand and supply

AD Valorem RateCustoms duty charged in terms of percentage on the value of
goods that are dutiable, irrespective of quality, weight, or any
other considerations. The ad valorem rates of duty are ascertained
from the invoice

Activity Based CostingA method for calculating indirect costs, based on the
activities that drive cost. This is in contrast to the classical
accounting methods which pool and arbitrarily allocate indirect
cost
Accounting SystemThe grouping of records and procedures that find out, record,
classify and report information about the financial position and
operations of an organisation
AcculturationThe process of becoming familiar with another culture. It
helps in conducting transnational businesses
AcknowledgementA written communication used to inform the buyer by the
supplier that the supplier has accepted the purchase order placed
on him. An acknowledgement thus creates a bilateral contract as
long as the terms of the acknowledgement are not significantly
different from those of the purchase order
Acquisition CostAcquisition costs are the total costs associated with the
acquisition of a material. Such costs include costs towards
ordering, transportation, handling , inventory holding etc. It is
noted in the context of the Economic Order Quantity (EOQ)
Acquisition ProcessThe sequential activities involved in obtaining necessary
inputs for an organization is the Acquisition process. It includes
determination of need, communication of need, identification of
potential sources, invitation and consideration of bids, placement
of the Purchase Order, receipt and inspection and making payment
Advance PaymentPayments in advance of delivery for a mutually agreed amounts
or for specified percentage of the purchase price that buyer shall
pay to the seller
Advance Shipping NoticeA standardized Electronic Data Interchange form detailing an
inbound shipment to a receiving location (consignee)
Advanced chargesThe amount of freight or other charges on a shipment advanced
by one carrier to another, or to the shipper, to be collected from
the consignee
AgencyIt's a legal entity denoting the legal relationship that
exists between two parties by which one is authorised to perform
or transact specified business activities for the other
AgentA person or an organisation authorised to act for another
person or organisationin dealings with a third party